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Types of Financial Crimes in Canada: Understanding the Consequences
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Financial crimes are a growing concern in Canada, and it’s essential to understand the different types and their penalties. According to Section 380 of the Criminal Code, anyone who uses deceit, falsehood, or other fraudulent means to defraud the public or an individual of money or property can be charged with fraud.
Fraud Over $5,000
If you are found guilty of fraud over $5,000, it will be treated as an indictable offence, carrying a maximum penalty of 14 years in prison. This applies if you intended to influence the market price of stocks, shares, or anything offered for sale to the public.
Factors Considered by the Court
Aggravating Circumstances
- Magnitude, complexity, duration, or degree of planning involved
- Number of victims and whether the fraud significantly affected their health and finances
- If you took advantage of your reputation in the community
- If you concealed or destroyed records related to the fraud
Fraud Under $5,000
If the alleged fraud is valued at less than $5,000, the Crown has the option of treating it as a summary conviction, which carries a less severe penalty.
Using the Mail to Defraud
Section 381 of the Code makes it illegal to use the mail to deliver letters aimed at deceiving or defrauding the public or to obtain money under false pretences. The maximum penalty for this charge as an indictable offence is two years imprisonment, with lesser sentences given for charges treated as summary convictions.
Fraudulent Manipulation of Stock Exchange Transactions
Section 382 of the Code makes it illegal to mislead the public about stocks and securities being publicly traded. If you are found guilty of an indictable offence, the maximum penalty is 10 years in prison, with lesser sentences given for charges treated as summary convictions.
Prohibited Insider Trading
The same section also prohibits insider trading, which involves buying or selling a security using inside information. This law applies to shareholders, those involved in a company takeover or merger, and anyone who obtained information from someone in these positions. If the Crown proceeds with an indictable offence, you face a maximum of 10 years in prison, with lesser sentences given for charges treated as summary convictions.
Falsification of Books and Documents
Section 397 of the Code makes it an offence to destroy, alter, or falsify any documentation related to a security or document. If you are found guilty of an indictable offence, the maximum penalty is five years in prison, with lesser sentences given for charges treated as summary convictions.
Identity Theft/Trafficking in Identity Information
Section 402 of the Code makes it an offence to obtain or possess another person’s identification with the intention of using that to commit an indictable offence such as fraud. The related charge of trafficking in identity information involves selling someone else’s information to allow others to commit an indictable offence. Both charges can be treated as indictable offences, carrying a maximum sentence of five years in prison.
Identity Fraud
Section 403 of the Code makes it an offence to impersonate someone else and use that person’s identity information to gain an advantage for yourself or someone else, obtain property or an interest in property, cause disadvantage to the person being impersonated, or avoid arrest or prosecution. If you are found guilty of an indictable offence, the maximum penalty is 10 years in prison.
Recent Development: Repeal of Mandatory Minimum Penalties
Bill C-5 repealed mandatory minimum penalties for fraud-related crimes, marking a shift towards more flexible sentencing approaches. As financial crimes continue to evolve, it’s crucial to stay informed about the different types and their consequences in Canada.